DTAA art 27 — the law in short
What the courts have decided on section DTAA art 27, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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ADIT v E-Funds IT Solution Inc
Supreme CourtHelps taxpayer
We outsource back-office work to our Indian subsidiary. Does that give us a permanent establishment in India?
No, not by itself. The Revenue must prove that a fixed place in India was at the disposal of the foreign company and that the foreign company carried on its own business through it. Close association between parent and subsidiary, and the fact that the Indian company depends on the group for its work, do not answer that question, and the functions-assets-risks analysis borrowed from transfer pricing is not the test for whether a fixed place permanent establishment exists.
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Dell International Services India Pvt Ltd v DCIT
ITATHelps taxpayerNo later treatment found
You offered extra income to give effect to a MAP resolution. The officer says the proviso denying a Chapter III deduction on enhanced income applies. Does it?
No, on this Bench's view. The proviso applies only to a transfer pricing adjustment made by the Assessing Officer. It does not reach income enhanced under a mutual agreement procedure resolution, which is one of several distinct modes by which an arm's length price can come to be determined, and where the assessee actually invoices its associated enterprise and brings the foreign exchange in.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
